Independent schools and tax policy under Mrs Thatcher

The election of the Conservative Government in the UK in 1979 has brought several major changes in tax policy which have sought to encourage private charitable giving, at the same time as tax rates have been reduced dramatically. We examine the effect of these changes on independent schools. Although the schools' special exemption from VAT is far more important than their relief from the direct taxes which follows from charitable status, they are likely to have suffered significantly from the latest tax cuts. Government subsidies to private schools through general concessions to charities are likely to decrease further in importance, and be replaced by more direct, targeted support through grants and particular special schemes.